Dishonesty in Complex Environments: Deliberate Lies, Shortcuts, or Accidental Mistakes?

<jats:p>Compliance with complex regulatory requirements can be challenging. We study why and how complexity affects non-compliance in terms of incorrect reporting. Our novel experimental design isolates two distinct complexity effects: an increase in honest mistakes and a substantial shift toward self-serving dishonesty. We identify two mechanisms for this dishonesty shift. First, individuals with social image concerns systematically take advantage of plausible deniability. Second, we document an unexplored form of dishonesty: besides conscious lies, individuals use fraudulent shortcuts in response to complex cheating opportunities.</jats:p>